posted by Christine J. Lorenz, CEBS
The Affordable Care Act makes significant changes to group health plans, and so far there are few solutions to alleviate escalating health care costs. All employers, especially small business owners, are concerned how rising health care costs will affect their bottom line:
• In a survey of Chief HR Officers by the HRA Policy Association in Sept. 2010, 96% thought company health care costs would increase beyond what is anticipated.
• The average family premium in 2000 was $6,438. In 2010 it was $13,770. (Source: The Kaiser Family Foundation and Health Research & Educational Trust Employer Health Benefits 2010 Summary of Findings).
posted by Christine J. Lorenz, CEBS
The recent court case ruling on Clacor, Inc v. Madison National Life Insurance is a teachable moment for self-funded plans with stop loss coverage. The case involves how the plan document and stop loss contract language impact COBRA coverage and eligibility.
It really brings home the importance of making sure that all plan participants are eligible for the health plan at all times and that eligibility rules stated in the plan document are followed, as well as the COBRA timelines for plan participants who have lost coverage due to a COBRA qualifying event. It also reminds us of the importance of the documentation of approved dates of FMLA leave as well as any additional permitted employer certified disability, leave of absence or lay-off provisions leaves in the plan document that will allow an employee to remain eligible for the plan if the employee is not actively at work.
April 14th, 2011 at 06:09am
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Posted by Christine J. Lorenz, CEBS
Consumers shopping for health insurance coverage can go to the federal website, www.healthcare.gov for information.
The health law that Congress passed in March called for the creation of the site, which advocates say will make it easier to shop for a plan. Consumers will be able to see all options available where they live, compare costs and determine if they qualify for a government program.
Federal health officials say the website - which cost $3.5 million to build - works as a bridge to help consumers until 2014 when much of the new law takes effect, including provisions that bar insurers from discriminating against people with pre-existing conditions and establishing new health insurance exchanges, the marketplaces that make it easier for consumers and small business to buy insurance. In a news conference this afternoon, HHS Secretary Kathleen Sebelius rejected criticism that the site was offering a political message. A video on the site touts the new law's benefits. "Health care really is getting better," she said.
What's on the site?
March 14th, 2011 at 12:07pm
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posted by Christine J. Lorenz, CEBS
Under health care reform, changes enacted in 2010 allowed parents to obtain coverage for adult children up to age 26. However, many states have yet to conform their state tax provisions to this change in the health care law. Because of this lack of conformity, employers and taxpayers are confused and face uncertainty about their 2010 taxes and States are scrambling to enact changes.
March 11th, 2011 at 14:29pm
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posted by Christine J. Lorenz, CEBS
Here is an interesting article from Kaiser Health News on direct-pay physician services. For more information on a variety of subjects concerning health care, go to http://www.kaiserhealthnews.org.
Just about everyone agrees that the way we pay for primary care needs fixing. Under the current insurance model, doctors get paid for procedures and tests rather than for time spent with patients, which makes doctors and patients alike unhappy and increases costs. Now some medical practices are sidelining health insurers entirely, instead charging patients a moderate membership fee each month. The approach gets a nod in the health overhaul law. But not everyone agrees it's the right way to go.
Qliance Medical Management Seattle-based Qliance Medical Management's three clinics typically charge a patient about $65 a month for unlimited access to the practice's 12 physicians and nurse practitioners. (Fees vary depending on the level of service and the patient's age.) Office appointments last up to an hour and clinics have evening and weekend hours, with e-mail and phone access to clinicians as well. Routine preventive care and many in-office procedures are free; patients pay for lab work and other outside services "at or near" cost, and they get discounts on many medications.
The average $700 to $800 per patient that Qliance receives annually in membership fees is up to three times more than a doctor in a standard insurance-based practice might make per patient, says Norm Wu, the company's president and chief executive. "So we can have a third the number of patients and get the same revenue per clinician, but with much less overhead," he says. The approach, he says, allows Qliance to funnel more money into the care itself — through longer office hours, for example, or better diagnostic equipment.
Bruce Henderson joined Qliance when its first clinic opened in 2007. Although at the time he had health insurance through his job, Henderson, now 63, was soon laid off. Now he pays Qliance $79 a month for primary care and carries a catastrophic medical plan with a $10,000 deductible, for which he pays $225 a month.
Henderson has high blood pressure, high cholesterol and Type 2 diabetes. Working with his Qliance doctor, he switched to lower-cost medications and reduced his monthly out-of-pocket costs from $500 to $100. He goes in regularly for blood work and exams to keep his diabetes in check. Periodically he also has early skin cancers removed and last month was in three times for a cyst removal.
"The doctors will sit there with you as long as you need them to," he says. "They don't rush in and out."
A 2007 Washington state law encourages "innovative arrangements between patients and providers" like direct-pay primary care practices. There are 15 other direct-pay practices in Washington state, according to a 2010 report to the legislature from the state's insurance commissioner. Some are more conventional "concierge" practices, which are aimed at well-to-do patients, charging as much as $850 a month for personalized, high-touch services. But the biggest growth is in practices that charge fees in the $85 to $135 range, according to the report.
Although Washington state may be a hotbed of direct-pay activity, primary-care physicians in many other states are offering similar services. At Access Healthcare in Apex, N.C., for example, members pay $39 a month plus $20 per visit for unlimited primary-care services, says the practice's founder, Brian Forrest. Having run the subscription-based practice for 10 years, he is now expanding, and expects the first franchises to open this summer.
Forrest, a physician, says that half of his clients have insurance, with their typical copayments for primary-care visits averaging $35 to $50. "For lots of insured patients, it's actually cheaper for them to see us," he says.
Washington state's representatives in Congress and its governor, Christine Gregoire (D), successfully pushed to involve direct-pay practices in the federal health-care overhaul. Under a provision in the new law, insurers selling plans on the state-based insurance exchanges that will open in 2014 will be allowed to "provide coverage through a qualified direct primary care medical home plan that meets criteria established by the Secretary."
As envisioned by Qliance, direct-pay practices like theirs will link to custom "wraparound" health insurance policies that would pick up where Qliance leaves off, providing specialist care, hospitalization and the like.
"What we're inventing here is a new relationship between primary care and insurance," says Garrison Bliss, chief medical officer for Qliance Medical Management. Patients would essentially have two monthly health-care fees: one that they'd pay to a doctor's office for their primary care and another they'd pay to an insurer for all their other care. Providing better primary care should reduce insurance claims for emergency care and hospitalization down the road, Qliance's Wu says.
This idea raises a host of questions, policy experts say, including how direct-pay primary-care practices could charge monthly fees for preventive care services that under the new law are supposed to be provided free.
Some experts have more fundamental reservations about this approach. While agreeing that the current payment model for primary care doesn't work very well, "it doesn't make any sense" to provide primary care outside the health insurance system, says Robert Berenson, a fellow at the Urban Institute. "This is not going to work for a lot of patients who can't afford the out-of-pocket subscriptions," he says
March 10th, 2011 at 13:55pm
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The price of preventing preterm labor is about to go through the roof.
A drug for high-risk pregnant women has cost about $10 to $20 per injection. Next week, the price shoots up to $1,500 a dose, meaning the total cost during a pregnancy could be as much as $30,000.
March 01st, 2011 at 12:20pm
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Posted by Christine J. Lorenz, CEBS
Is using the word “rationing” of healthcare alarmist, or is it straight talk? Like so many instances in healthcare policy & statistics, it is a question of vocabulary. Will there be blatant rationing such as there was in this country for things like food and gasoline and tires during World War II? In that case, rationing meant that if you ran out of ration chits, you did not get the product, period. Also, rationing was not equal. The allocation was higher for persons deemed by the government to have a more important role. In the case of PPACA, the product (“healthcare”) may be available, but the supplier (doctors) may be in very short supply or not serving customers in certain payment categories (such as Medicare or Medicaid and maybe, later, state exchanges). The net impact of limited supply & delay is the same as rationing.
February 22nd, 2011 at 16:28pm
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Posted by Christine J. Lorenz, CEBS
The Patient Protection and Affordable Care Act (PPACA) has identified at least ten (10) essential categories of items and services that must be included in the essential health package (“EHP”):
(A) Ambulatory patient services.
(B) Emergency services.
(C) Hospitalization.
(D) Maternity and newborn care.
(E) Mental health and substance use disorder services, including behavioral health treatment.
(F) Prescription drugs.
(G) Rehabilitative and habilitative services and devices.
(H) Laboratory services.
(I) Preventive and wellness services and chronic disease management.
(J) Pediatric services, including oral and vision care
Essential health benefits (“EHB”) are required to be offered by qualified health plans participating in health insurance exchanges beginning in 2014, as well as issuers in the individual and small group markets, Medicaid benchmark and benchmark equivalent plans and state basic health programs for low income individuals not eligible for Medicaid. While self-funded group health plans are not required to offer essential health benefits (with the exception of certain preventive services for non-grandfathered plans), if a plan offers any of the essential health benefits, the prohibition on annual and lifetime limits will apply to those benefits. HHS is using the term “essential health package” (EHP) when referring to the essential health benefits that are subject to the annual and lifetime limit rules.
The PPACA delegated authority to define this EHP to the Secretary of HHS. Congress specified that the scope of the EHP essential health benefits should be equal to the scope provided under a typical employer plan. Work by the Department of Labor (DOL) will help to inform that determination. In defining and updating EHBs, the Secretary must ensure that such essential benefits reflect an appropriate balance among specified categories of care so benefits are not unduly weighted in a certain category.
Several restrictions have been placed on HHS. The department cannot make coverage decisions, determine reimbursement rates, establish incentive programs, or design benefits in a way that discriminate against individuals because of age, disability or expected length of life. In addition, HHS must take into account the health care needs of diverse segments of the population including women, children, persons with disabilities and other groups, and ensure that health benefits established as essential not be subject to denial to individuals against their wishes on the basis of individuals age or expected length of life or the individuals present or predicted disability, degree of medical dependency or quality of life. Further, PPACA explicitly permits use of those utilization management practices in common use by group health plans and health insurance insurers at time of enactment and bars the issuance of regulations that prohibits their use.
The impact of the department’s work to define EHPs is expected to be widespread. Its decisions will likely:
1. Set coverage standards for significant segments of the private and public insurance markets across the country.
2. Provide clear direction to the states and insurance industry, recognizing states are obligated to pay for benefits they mandate above and beyond those required by the Secretary.
HHS acknowledges the diversity of the health insurance industry and need for flexibility across the states in addressing their varying circumstances, practices and priorities. It also recognizes the need to provide meaningful coverage while ensuring an affordable premium.
HHS is asking the following questions to consider how EHPs will be logically cohesive and address statutory requirements now and in the future.
1 At what level of specificity should EHB be framed?
2. How are issues of time, duration, frequency, scope and specific services best addressed?
3. What defines and distinguishes a medical service from a non-medical service?
4. How should this distinction be considered and applied in the context of EHBs?
5. How can the federal standard for benefit coverage best be reconciled with existing state and regional variations in practices and benefit coverage patterns including variations in state mandated benefits?
6. How much flexibility should be given to states offered through exchanges?
7. What can be learned from the practices of those employers who offer multiple plans today? About plan design, consistency and fairness.
8. Considering the varying needs of diverse populations, what policy, principals and criteria should be taken into account to prevent discrimination?
9. How can these considerations best be balanced against the content of a typical employer plan and the cost of insurance coverage?
10. Assuming insurers continue to have a role in deciding exactly what services to pay for, what information is needed to monitor the decisions that are made?
11. How should that information be collected and how should that information be used, if at all, in updating the definition of EHBs over time?
12. What are the roles of exchanges, states and the federal government in this task?
13. What criteria should be used to adjust the EHBs over time and what should the process be for their modification?
14. How can we ensure over time modifications of EHBs are consistent with the initial benefit design but also reflective of involving science?
The Institute of Medicine, at the request of HHS, is currently undertaking a study that will make recommendations on the criteria and methods for determining and updating the essential health benefits package. I will post information as it becomes available on this blog and in our newsletters. To sign up for our newsletters, go to Tucker Administrators Newsletters and Alerts.
February 02nd, 2011 at 14:00pm
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We just received updated reports from our business partner, AWAC®, and they show Tucker Administrators clients continue to receive hard dollar savings to the tune of almost $1.1 million since 2008 as a result of AWAC® claims surveillance program. AWAC® uses a proprietary physician-created electronic surveillance system with over 80,000 clinical and financial algorithms. This system cross matches member claims and to uncover current and future opportunities for cost reduction and improved care, detects billing errors and isolates patterns of fraud or abuse. AWAC® board-certified physicians then effectively negotiate with providers of medical services and products for best prices beyond any network discounts. This process is done with all self-funded plan claims submitted to Tucker Administrators every day, before the claim is paid.
January 17th, 2011 at 13:27pm
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The IRS issued Notice 2011-5 with procedures that will allow FSA debit card users to purchase OTC medicines or drugs with a prescription. The debit card industry and merchants are evaluating the process necessary to fulfill the requirements of the IRS as far as record-keeping. For example, merchants that have an in-store pharmacy such as Walgreens, CVS, Target, or Walmart will have to retain member information, as well as track the assigned Rx number back to the point-of-sale to satisfy the IRS regs. Merchants that do not have a pharmacy do not have the Rx number retention requirement because there is no Rx number assigned. The member may swipe their cards at these stores for OTC purchase of a medicine or drug, but must still submit a manual claim to Tucker Administrators with proof of purchase and a copy of the prescription. These regs give some relief to the FSA participant to avoid out-of-pocket expense.
January 04th, 2011 at 13:27pm
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An employer can change group health plan carriers without facing the full force of the Affordable Care Act.
Federal agencies have announced that interpretation today and implemented it by adding an amendment to interim final rules that affect when group health plans and individual health insurance arrangements can keep “grandfathered status" under the Patient Protection and Affordable Care Act (PPACA), a component of the Affordable Care Act package.
January 04th, 2011 at 12:53pm
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With the advent of the Patient Protection and Affordable Care Act (PPACA), ACO's are springing up across the United States. The purpose of the ACO is to improve quality of care and outcomes, and eliminate waste by offering financial incentives to health care providers.
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